Precious metals market cooled down last week with renewed speculations of the Fed tapering its current asset purchase program as the U.S economy is slowly recovering (or at least appears to recover). The week started with both gold and silver moderately gaining back some altitude after their tumble on Friday. Will this recovery persist? On today’s agenda: Bank of Japan’s monetary policy meeting, China’s new loans, German high court ruling and GB manufacturing production.
Here is a short outlook for precious metals for Tuesday, June 11th:
Precious Metals – June Update
On Monday, gold slightly increased by 0.23% to $1,386.3; Silver also slightly rose by 0.84% to $21.93. During June, gold declined by 0.45%; silver, by 1.36%.
In the chart below are the normalized prices of gold and silver for 2013 (normalized to 100 as of May 15th). The prices of gold and silver haven’t done much in the past couple of weeks.
The gold and silver futures volumes of trade have picked up on Friday to 211 thousand and 98 thousand, respectively – the highest volume of trade in recent weeks. Following last week’s non-farm payroll report, in which the numbers were slightly better than expected precious metals, resumed their downward trend. If the volume will pick up in the coming days, this could lead to a rise in the volatility of gold and silver. The chart below shows the volume of trading gold and silver futures in the CME during recent weeks.
Bank of Japan – Monetary Policy Meeting: Bank of Japan will come out with its interest rate decision and monetary policy for June. In the past several days the Japanese yen rallied against the USD;
China New Loans: This report will pertain to the recent shifts in China’s new loans. Based on the recent update, the total loans rose again for the second consecutive month; this report is another indicator for China’s economic growth;
German High Court Ruling on EMS: The German Court will publish its final ruling on the legality of the ECB’s Outright Monetary Transactions policy (OMT). If the Court will rule in favor the program it could help stabilize the Euro;
Great Britain Manufacturing Production: this report will present the annual rate of GB’s manufacturing production in April; in the previous report regarding March 2013 the index rose again by 1.1% (M-2-M); this news may affect the British Pound;
Currencies / Bullion Market – June Update
The Euro/ USD slightly rose on Monday by 0.30% to 1.3257. During June, the Euro/USD increased by 1.98%. Conversely, other currencies such as the Aussie dollar slightly depreciated yesterday against the U.S dollar by 0.35%. The correlations among gold, Euro and Aussie dollar strengthened as seen in the chart below. If these correlations will continue to strengthen, the movement of the Aussie, Euro and Japanese yen are likely to affect bullion rates.
Current Gold and Silver Rates as of June 11th
Gold (short term delivery) is traded at $1,384.50 per t oz. a $1.5 or 0.11% decrease as of 01:39*.
Silver (short term delivery) is at $21.83 per t oz – a 0.46% decrease as of 01:39*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Bank of Japan – Rate Decision and Monetary Policy Statement
Tentative – China New Loans
Tentative (over two days) – German High Court Ruling on EMS
09:30 – Great Britain Manufacturing Production
09:30 – Great Britain Claimant Count Change
10:00 –EU Industrial Production
Tentative – U.S 10 Year Bond Auction
19:00 –U.S. Federal Budget Balance
For further reading:
- Gold and Silver Outlook for June
- Will Gold Recover from its Recent Fall?
- Weekly Outlook of Financial Markets for June 10-14
- Gold and Silver Prices Outlook for June 10-14
- Gold and Silver Yearly Outlook For 2013